Excerpts from recent editorials in newspapers in Illinois
June 11, 2018
The (Champaign) News-Gazette
Population drop is complicated
A new report argues that the reasons for and the size of the state’s population decline are exaggerated.
The good news, according to the Chicago-based Better Government Association, is that, contrary to some reports, people are not leaving Illinois because of increased state income taxes.
The bad news is that people are leaving, but perhaps not as many as some fear, and they are leaving for a variety of reasons, not specifically because of higher state income taxes.
“The effects of well-known negatives in Illinois, such as chronic deficits, unpaid bills and pension shortfalls, are more difficult to quantify. But it’s clear there is a reshuffling of the state’s demographic deck, occurring in ways that don’t fit neatly into a TV attack ad,” states a report written by the BGA’s Tim Jones.
Jones’ report focused on a much-discussed problem that’s been the subject of innumerable news reports — Illinois’ declining population.
The report attributes much of the rhetorical hand-wringing and blame-laying associated with this issue to this state’s brutal partisan politics.
The report noted that Illinois’ population of roughly 12.5 million has been declining slowly over recent years. But the report points out that population estimates are often “revised upwards” and that, in any case, the numbers won’t be official until after the completion of the 2020 census.
It acknowledges that the “Illinois numbers downturn is troubling,” but contends it is “far from a free fall some media reports and partisans suggest.”
Coming up with population estimates is a complicated business, made even more so by the mobility of modern society. It’s also generally true that attributing a phenomenon to any single factor — an increase in the state income tax — is a fool’s errand.
People move or don’t move for a variety of reasons. The report cited Minnesota, which has a progressive income tax with tax rates ranging from 5.35 percent on middle-income earners up to 9.85 percent on individuals earning above $156,000, as relatively healthy and prosperous.
But what if Illinois were to adopt a progressive income tax similar to Minnesota’s, a move that Pritzker has said he wants to make? What would be the impact here?
It might be altogether different because the conditions in Illinois are far different than those in Minnesota, and not just because of their differing income tax laws. Illinois is effectively bankrupt. Minnesota is on firm financial footing.
Property taxes are not income taxes, but the report asserts that property taxes here are a “significant tax Achilles heel.” Maybe some of those moving are attracted by lower property taxes elsewhere.
What about good jobs and new opportunities to create a better life for a family? An unhealthy state like Illinois does not have as much to offer as vibrant states with booming economies do.
No single thing is wrong with Illinois — many things are wrong with Illinois, mostly related to the state’s terrible finances.
Living in this state is like living in a house with a faulty foundation that may — or may not — collapse — maybe sooner, maybe later.
People may want to stay for a variety of reasons — family ties, friends, roots in the community — but they’re tempted to go elsewhere for a variety of reasons — job prospects, better educational opportunities, climate, taxes (property and income).
Whatever the reason, Illinois is on the wrong side of that divide, and the people in charge need to do something — many things — about it/them.
June 10, 2018
The (Arlington Heights) Daily Herald
Nod toward pension crisis is a start, but we need much more
There’s room for debate over whether the fact that Illinois managed to get a budget on time this year merits all the back slapping being done by Republican and Democratic state leaders, but there’s no denying the agreement produced sighs of relief inside and outside the halls of the Capitol. For one year, at least, presuming all the revenue projections hold true, schools, governments and social services agencies won’t spend their days wondering how long they can keep the doors open.
That matter of the revenue projections does deserve some attention, though -- not merely because predicting income is invariably a convenient and inexact budgetary tool but more so because of one of the areas where revenue projection figures prominently in this budget -- public employee pensions.
While everyone rightly touts the good news lawmakers have for schools, the hulking, snorting elephant in this budget -- and likely in many upcoming state spending plans -- is the $130 billion-and-counting shortfall in the state’s pension liabilities.
Thankfully, lawmakers did at least acknowledge the problem, approving a slate of incentives designed to attract some teachers and other public employees into short-term buyouts that could eat into the deficit to the tune of hundreds of millions of dollars. If the incentives work as hoped -- and that’s a big IF -- this is a reasonable start. But it’s only a start.
Even hundreds of millions of dollars are of limited consequence against a deficit that’s in the hundreds of billions. Ever since the state Supreme Court shot down a previous effort to get control of the pension debt, the subject -- once the predominant topic of conversation related to Illinois’ financial health -- has been little more than a whisper, a whimper and a biting of the lower lip.
Thus, what was once considered an unacceptable shortage in the $80 billion range has ballooned to going on twice that amount. Finding an answer, as history shows us all too well, is not going to be easy. But defraying an answer could be disastrous.
So far, the subject has played little to no role in the race for governor, and it is rarely talked about in campaigns for legislature, but when the dust settles from the November election, it may well be true that failure or inability to deal with this issue could be more of a headache for the next governor -- whoever he may be -- than even the recent trend of standoffs over spending and economic incentives.
More importantly, it will be more of a headache for taxpayers and all the affected pensioners. And, schools, governments and social services agencies could find themselves staring yet again into the cold maw of uncertainty they’ve only recently barely escaped. Election politics have afforded us a short financial breather. We and our political leaders need to use it to get serious about how to deal with that elephant.
June 9, 2018
Why steel, soybeans, shipping may all bring us simoleons
It didn’t take long for the steel market to respond and enable Granite City Steel to restart a second blast furnace. It’s hard to argue with a total of 800 jobs returning to the area.
Let’s add to that Illinois Gov. Bruce Rauner announcing $20.1 million in freight mobility projects in our area. Investment in our region’s essential strength — being a crossroads of river, rail, road, air and pipeline traffic — is the best use of our tax dollars because it has been a proven path to prosperity back to the days of George Washington building canals, lighthouses and a National Road.
Taken together, these are two great pieces of news. Although some may question timing of announcements by those who wish to remain in office, there is no denying these bits of economic progress are real and will make southwestern Illinois’ economy stronger.
Happy news along the river, but then there’s fretting on the farms to the east.
While community members are right to worry that the steel tariffs that are boosting Granite City Steel might also bring retaliation or a trade war, not every soybean farmer in Illinois is buying in to the theory. China may be our largest soybean export buyer, and Brazil may be on the cusp of a bumper crop, but Argentina is in a drought.
World trade is a moving target and export ag products are moveable, so it’s hard to buy in to the cries of “doom.” But then, cries of “trade war” are designed to sway voters in a way that cries of “another 50 cents a bushel” never will.
We elected a Manhattan businessman with a flair for the dramatic. We are seeing record levels of employment and the Dow is right about 25,000 even with all the trade fears.
We saw what we got when we elected a Chicago neighborhood organizer whose only fire was at the tip of his Marlboro. Slow progress from the recession, a 50-year low for home ownership and record debt.
The Trump trade roller coaster is far from over. But it likely has less to do “will I have a job” and more to do with “will that job’s salary help me afford groceries.”
We now know the answer for 800 residents. We may soon know it for a lot of construction workers and freight workers.